06.10.2017 | US conflict mineral rule under threat

A regulation credited with promoting greater supply chain transparency appears to have been weakened, and may eventually be repealed.

Republicans are stepping up efforts to overturn a regulation requiring publicly traded companies in the US to reduce the risk of ‘conflict minerals’ entering their supply chains, despite evidence that the measure is helping to break the link between mining and human rights abuses in central Africa.

Senior Congressional Democrats have warned that apparent partial enforcement of Section 1502 of the Dodd Frank Act, introduced four years ago, could expose listed corporations to significant reputational risk.

Under the legislation, the so-called conflict minerals rule, US listed companies are required to undertake measures that enable them to disclose whether goods such as jewellery and electronic devices are free of the following minerals linked to militants in the Democratic Republic of Congo or adjoining countries: gold, coltan, cassiterite and wolframite or the derivatives of the latter three, tantalum, tin and tungsten, respectively. The rule also extends to any other mineral or its derivative determined by the US government to be financing conflict in central Africa.

DRC has been riven by civil war and instability for decades, fuelled by struggles for control of the country’s vast natural resources. Supporters of the conflict minerals rule say it has led to an expansion of regulated DRC mines and schemes tracing the origin of minerals in the region. They argue that the regulation is necessary to alert investors to the risk of minerals associated with violence finding their way into goods.